Fevertree's stock has surged by over 20% following the announcement of a partnership with Molson Coors, the owner of popular beer brands Coors and Carling.
The deal stipulates that Molson Coors will exclusively manage sales, distribution, and production of the Fevertree brand in the US market, as reported by .
Analysts have unanimously praised the agreement, anticipating mutual benefits as both companies diversify into new markets.
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As part of the arrangement, Molson Coors will also acquire an 8.5% stake in Fevertree, with the proceeds from this transaction being returned to shareholders through a £71m share buyback programme.
Fever-Tree CEO Tim Warrillow hailed the deal as "transformational" for the Fever-Tree brand in the US, stating, "As the Fever-Tree brand has grown in the US, so has the opportunity ahead of us, reflecting the increasing number of categories and occasions that our products are relevant to,".
Michelle St. Jacques, Chief Commercial Officer at Molson Coors, echoed these sentiments, describing Fevertree as the "perfect fit" for their non-alcoholic beverage portfolio.
Analysts at Jeffries noted that "Fevertree... will benefit from a significant uplift in scale and execution capability in its largest market, whilst also de-risking the supply chain and driving higher quality of earnings," They further labelled the deal as a game-changer for Fevertree's potential earnings power.
Panmure Liberum also lauded the deal as "transformational," viewing Molson Coors as "a long-term backer and a potential eventual acquirer"
Panmure Gordon analysts have highlighted the financial upside for one firm due to favourable conditions in the US: "Guaranteed profits for five years and no working capital investment requirement in the US should free up significant cash flow for the group to return to shareholders," Panmure noted.